DFS Operators Up And Running In New Regulated Market

By Martin DerbyshireMay 8, 2018

The first daily fantasy sports contests with state government oversight went off in Pennsylvania last weekend.

Pennsylvanians may have been playing daily fantasy sports contests in gray market for the past few years. However, the Pennsylvania Gaming Control Board (PGCB) sent out a press release this week announcing government oversight of the contests began over the weekend.

Pennsylvania lawmakers made the games legal as a part of a major gaming expansion legislation package passed in October 2017. According to the board, the daily fantasy sports contests marked the first official roll-out of new forms of gaming made legal under the legislation.

Online casino, online poker, and online lottery sales were also made legal in the gaming expansion. The Pennsylvania Lottery plans to launch online lottery sales this month. However, with the regulatory and licensing process still ongoing, the state’s first online casino and online poker sites are not likely to launch until the fourth quarter of the year.

Legal fantasy sports launches

Fantasy sports contests involve participants competing against one another by drafting a team of pro athletes. Participants earn points based on the statistical performance of the actual players in real-life sporting events. Daily fantasy sports take place over a finite period of time. However, traditional fantasy sports are often conducted over an entire season. Contests are run like tournaments. The top point-earning teams winning the largest pieces of a prize pool made up of entry fees after the operator takes a cut.

Under the new gaming expansion laws, Pennsylvanians 18 years of age or older can now legally participate in fantasy sports contests. However, they can only do so with approved operators.

Gaming board executive director Kevin O’Toole said the following operators have been approved:

Fanduel

DraftKings

DRAFT

Fantasy Football Players Championship

Boom Fantasy

Fastpick

Sportshub

Fantasy sports: Now regulated and taxed

O’Toole said fantasy sports operators are paying taxes in PA. Plus, local players are enjoying the benefits that government oversight of the games can provide:

“This roll-out also marks the beginning for Pennsylvania to create new revenue through the taxation of entry fees from players registered in Pennsylvania to participate in fantasy sports contests. Pennsylvania residents that enter Fantasy Sports Contests can know that they are participating in a fair playing environment and assured that each licensed operator meets standards set out in the law and regulated by the Gaming Control Board.”

The tax on fantasy sports operators’ adjusted revenue is 15 percent. The state began charging it on Saturday, April 28. All taxes collected by the Pennsylvania Department of Revenue from fantasy sports operators will go into the state’s General Fund.

O’Toole said local players who may have played fantasy sports contests in the past probably didn’t notice any change:

“Pennsylvanians who already participate in fantasy sports contests with any of these firms will see no difference in game play nor need to re-register. The Gaming Control Board urges, however, that players review the eligibility guidelines on the web sites of these fantasy sports contest operators prior to attempting to participate in play.”

More information regarding fantasy sports regulation in PA is available on the board’s website.

In addition to fantasy sports regulation in PA, the board oversees all aspects of the state’s casino industry.

There are 10 stand-alone and racetrack casinos in PA, along with the two smaller resort casinos. According to the board, these operations generate approximately $1.4 billion in tax revenue annually. The majority of the money goes to property tax reduction for PA homeowners.